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Summary High yield has generated much higher returns than loans over long periods of time even though loans had comparable drawdowns during the Global Financial Crisis (GFC) and the COVID bear market. High yield has outperformed loans by about 275 basis points per year for the tra...
Summary Policymakers are recognizing a new macro regime but are ignoring the trade-off between inflation and growth. A resulting recession is bad news for risk assets. Stocks fell last week after hawkish comments by Fed Chair Jerome Powell and data showing another month of jobs ga...
Summary CCC spreads are now significantly higher than the pre-Covid December 31, 2019, level. It is important to remember that the spread widening is occurring while both components of this credit spread are rising in actual nominal terms. Credit spreads are extremely importan...
Summary We’ve recently addressed the high-yield sector’s strong credit fundamentals and historically attractive valuations. We’ve also shown that yield to worst has been a reliable indicator of return over the next five years. Now, we’re turning the...
Summary M2 has essentially flat-lined since last January, which was well before the Fed began to take tightening action. This means that the behavior of M2 is obviating the need for the Fed to pursue a typical tightening, which almost always ends with a recession. The issue of...
Last quarter, we discussed the ongoing trends of sticky inflation and a hawkish Federal Reserve. These trends accelerated in Q2 as the U.S. Consumer Price Index rose again to 9.1% in June. Equity volatility remains elevated, but strategies such as covered calls can offer compelling op...
Strong data or not, the Fed will likely stay the course on rates. Why inflation is still the Fed's biggest concern, even as it eases. Why the robust jobs market didn't get the recession memo. Stronger U.S. economic data is leading to speculation the U.S. Federal ...
The yield curve is inverted from the 6-month T-bill to the 10-year Treasury note, which would suggest that the bond market’s message is “recession ahead, batten down the hatches”. Relatively tight risk spreads suggest that nobody is thinking too seriously about th...
We expect inflation to moderate to a lower level than where it is now by the end of the year, but still be uncomfortably above the Federal Reserve target. I believe there’s a good case to be made for investors getting into the market now; we just need to debate how and where. ...
Almost every month this year, the “discounts” on financial assets from their year-end 2021 prices have gotten larger, leaving the S&P 500 with its worst first half-of-the-year return since 1962 (narrowly avoiding its worst first half since the Great Depression). Ther...
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2024-07-04 13:10:00 ET Stock Traders Daily has produced this trading report using a proprietary method. This methodology seeks to optimize the entry and exit levels to maximize results and limit risk, and it is also applied to Index options, ETFs, and futures for our subscribers. This...
2024-06-14 15:48:00 ET Stock Traders Daily has produced this trading report using a proprietary method. This methodology seeks to optimize the entry and exit levels to maximize results and limit risk, and it is also applied to Index options, ETFs, and futures for our subscribers. This...
2024-03-05 02:26:00 ET Stock Traders Daily has produced this trading report using a proprietary method. This methodology seeks to optimize the entry and exit levels to maximize results and limit risk, and it is also applied to Index options, ETFs, and futures for our subscribers. This...